TD Bank N.A. (TDBNA), the 10th largest bank in the U.S., along with its parent company TD Bank US Holding Company (TDBUSH), has pleaded guilty and agreed to pay more than $1.8 billion in penalties to settle a Justice Department investigation into violations of the Bank Secrecy Act (BSA) and money laundering.
The bank admitted to conspiring to fail in maintaining an effective anti-money laundering (AML) program according to BSA standards, not filing accurate Currency Transaction Reports (CTRs), and engaging in money laundering activities. TDBUSH acknowledged its role in causing these failures.
This plea agreement is part of a coordinated resolution with the Federal Reserve Board, Treasury Department’s Office of the Comptroller of the Currency, and the Financial Crimes Enforcement Network.
Attorney General Merrick B. Garland stated that TD Bank’s failures made it an “easy target” for criminals, marking it as the largest bank in American history to plead guilty for such violations. He emphasized that the bank’s choice to prioritize profits over compliance with the law has now resulted in significant financial consequences.
Deputy Attorney General Lisa Monaco noted that TD Bank neglected its compliance obligations for years, which highlights the necessity for banks to maintain rigorous anti-money laundering measures. She described the guilty plea as a crucial reminder to other financial institutions about the importance of adhering to legal standards.
The Justice Department outlined that TD Bank failed to update its AML program and often ignored known risks, ultimately allowing significant sums of money to be funneled through the bank by corrupt associates. The bank’s poor oversight systems facilitated the movement of hundreds of millions of dollars linked to criminal activities.
Court documents reveal that from January 2014 to October 2023, TD Bank exhibited systemic deficiencies in its AML controls and neglected to take corrective actions, instead opting for a budget freeze that hampered necessary improvements.
Consequently, TD Bank did not effectively monitor a vast amount of transaction activity, leading to a staggering $18.3 trillion of transactions going unchecked from early 2018 to April 2024. The bank’s inability to adjust its monitoring systems enabled several money laundering networks to transfer substantial amounts of illicit funds.
As part of the resolution, TD Bank has agreed to forfeit over $452 million and pay a criminal fine exceeding $1.4 billion. It will also implement enhanced AML compliance measures under the oversight of an independent monitor for three years. The bank has cooperated with ongoing investigations and will continue to do so as part of its plea agreement.
The Justice Department’s investigation was supported by various agencies, and the case underscores the severe legal ramifications banks face when they fail to adhere to anti-money laundering regulations.